Earnings are the profits of a company in a given quarter or fiscal year, and they are an important indicator of a company's strength. Earnings reports can have a significant impact on the stock price, making it a major focus of Wall Street research and analysis.

Earnings reports are usually released on what is known as a company's “earnings day,” when the financial world turns its attention to a single stock, or even to the entire market, to gauge its performance. The details of a company’s earnings and its EPS (earnings per share) are closely watched to assess the company’s profitability. Analysts look at the profits compared to the previous quarter and year-ago quarter, and then try to determine the future prospects of the company.

Since earnings are such a major focus for investors, financial institutions and the stock market, there’s always the concern of potential manipulation. Companies have been known to use accounting tricks to make their earnings look more attractive to third parties. There are also less nefarious forms of manipulation that companies use, such as pushing certain expenses into different fiscal quarters and timing certain expenses and sales to maximize the bottom line.

It's important to remember that not all companies have the same reporting period; some companies have a calendar year ending, while others have a fiscal year end. As such, comparing one company’s financial performance directly to another is not always an apples-to-apples comparison.

Analysts often use common ratios to evaluate and compare earnings of different companies. They will look at the operating profit margins, net profit margins and earnings per share. These ratios are calculated from the company’s reported earnings, and provide a way to measure overall performance and compare that performance to different industries and to competitors.

Overall, earnings provide an important metric for investors looking to assess how well a company is doing. It is the key financial measure that is used to calculate stock prices and to assess the financial strength of a company. Analysts look at both the positive and negative numbers to determine how the company is performing, and the stock market closely follows these numbers when determining the company’s value. But since earnings are so closely watched, there’s always the potential for companies to manipulate the numbers to make their performance look better than it is. Investors need to be aware of the potential for manipulation, as well as subtle differences between companies when evaluating earnings reports.